« previous next »

Author Question: What are the factors that will determine the size of some future required tax increase to pay off ... (Read 52 times)

bcretired

  • Hero Member
  • *****
  • Posts: 525
on: Jun 30, 2018
What are the factors that will determine the size of some future required tax increase to pay off all debt?
 
  What will be an ideal response?

Question 2

Explain what can occur to cause an increase in the debt ratio.
 
  What will be an ideal response?


af

  • Sr. Member
  • ****
  • Posts: 356
Reply #1 on: Jun 30, 2018
Answer to Question 1

The factors will include: the size of the debt at that time, how long it will take to pay off the debt, and the interest rate on the existing debt.

Answer to Question 2

The debt ratio is simply the ratio of the stock of debt to GDP. So, the debt ratio will rise whenever the increase in debt is greater than the increase in GDP. Even if the primary deficit is zero, the debt ratio will increase if the interest payments on the existing debt are such that they more than offset the fact that the economy is growing. So, a comparison of the real interest rate and growth rate of GDP will be important. Also, the debt ratio will rise if the primary deficit exists (or increases).


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

bcretired

  • Hero Member
  • *****
  • Posts: 525
Reply #2 on: Jun 30, 2018
Thank you


af

  • Sr. Member
  • ****
  • Posts: 356
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Here are images of live zebrafish that were studied for genetics and head size to give insight into Here are images of live zebrafish that were studied for genetics and head size to give insight into
Chart depicting pupillary size in millimeters Chart depicting pupillary size in millimeters
To increase pressure using body weight, lean on your client. To increase pressure using body weight, lean on your client.
Selected Factors Affecting the Release of Growth Hormone Selected Factors Affecting the Release of Growth Hormone
Factors Affecting the Affinity of Hb for O2 Factors Affecting the Affinity of Hb for O2
A melting profile shows the increase in UV absorption versus temperature A melting profile shows the increase in UV absorption versus temperature
Video: Random alignment at Metaphase I Animation

For a complete list of videos, visit our video library